TCU Neeley Research Highlight – In the Journal of Operations Management publication, Associate Professor Ellie Falcone examines how supply-chain firms adopt corporate social responsibility (CSR) practices independently or leverage peers’ actions.
November 05, 2025
Ellie Falcone, associate professor of supply chain management in the Neeley School of Business, explored how corporate social responsibility (CSR) practices spread through supply chain connections and influence firms’ own CSR behaviors. The study finds that a firm’s CSR is positively influenced by the CSR practices of its customers and negatively influenced by the CSR of its suppliers. When a firm’s customers and suppliers are connected to each other, the positive influence from customers outweighs the negative influence from suppliers, reducing the negative effect. These findings shows that the structure of a firm’s network and its relationship with partners play an important role in shaping responsible business practices.
Research Abstract
Embedded in networks of relationships, firms are who they buy from and sell to. As a result, a firm's corporate social responsibility (CSR) practices can be influenced by CSR practices of its customers and suppliers – known as CSR diffusion. This study examines how CSR diffuses in a supply chain that encompasses a focal firm, its suppliers, and customers. Adopting a relational view, this research hypothesizes that a firm's CSR is influenced by its customer-base CSR differently than its supply-base CSR. By analyzing panel data consisting of 1972 firm-year observations integrated from multiple data sources, the results offer evidence for a positive impact of customer-base CSR and a negative impact of supply-base CSR on firm CSR. Interestingly, when customers and suppliers of a focal firm establish direct business connections (i.e., customer – supplier closure), the positive follow-suit effect of customer-base CSR is enhanced. In contrast, the negative free-ride effect of supply-base CSR is diminished. This suggests that a focal firm is more likely to embrace CSR practices from CSR-active supply chain partners when embedded in closed triads. This research shows the need to consider the directionality and closure of relationships in understanding the diffusion of voluntary, ill-defined, costly operational practices within a supply chain.
